Volvo's Electric-Performance Brand Polestar to Go Public in a $20 Billion SPAC Deal With Gores Guggenheim, Inc.

author: Eric Walz   

The fully-electric Polestar 2 is Polestar's first mass market EV.

After months of rumors, electric-performance vehicle brand Polestar, which is jointly operated by Swedish automaker Volvo Cars and its parent company Chinese automaker Zhejiang Geely Holding ("Geely"), announced on Monday an agreement to merge with Gores Guggenheim, Inc. 

Gores Guggenheim, Inc. is a special purpose acquisition company ("SPAC") formed by affiliates of The Gores Group and Guggenheim Capital, LLC. Upon closing of the proposed business combination, the combined new company will be named "Polestar Automotive Holding UK Limited."

The deal would make Polestar a public company listed on the NASDAQ under the ticker symbol "PSNY."

The transaction implies an enterprise value of approximately $20 billion. Current Polestar equity holders will retain approximately 94% ownership in Polestar and roll 100% of their equity interests into the new pro forma company.

"Polestar is a stand-out company in the EV space – a design-led, sports-performance oriented electric OEM focused on industry-leading sustainability solutions," said Alec Gores, Chairman and Chief Executive Officer of The Gores Group and Chairman of Gores Guggenheim "The company is truly differentiated from others given its premier vehicles, attractive financial profile, strong track record of performance, and the fact that it already has cars on the road across the globe." 

In April, Polestar announced it raised $550 million in its first ever outside investment round.

The SPAC merger with Gores Guggenheim is the latest in a series of high-profile mergers this year, as electric vehicle companies and startups working on self-driving technology, such as lidar, are entering into reverse merger partnership with SPAC companies to more easily raise funds from investors on Wall Street. 

Polestar's existing investors include Volvo Car Group and affiliates of Geely Chairman Eric Li, and actor and activist Leonardo DiCaprio.

Polestar was founded in 2017 by Volvo Cars and its partner company Geely as a new electric-performance brand to compete with companies like Tesla, as well as Chinese EV startups XPeng and NIO Inc.  

The company currently has two electric performance cars on the market, the limited production Polestar 1 and the Polestar 2 fastback. The Polestar 1 is a low-volume electric performance hybrid GT with a carbon fiber body that delivers 609 horsepower with an electric-only range of 124 km (77 miles). It was mainly intended to show the vision of Polestar as a performance electric brand.

The Polestar 2 is the automaker's first fully-electric, high volume car. It's offered in three variants with a combination of long- and standard range batteries along with dual- and single-motor powertrains. The Polestar 2 is being built at Geely's factory in Luqiao, China.

The Polestar 2 is rated at more than 400 horsepower, and can go from zero to 60 mph in about five seconds. It comes with a 78 kWh battery pack with a WLTP range of 292 miles (470 km). 

The Polestar 2 EV is also the world's first vehicle to come with Google's new "Android Automotive OS" built in. 

Android Automotive OS is an embedded version of Android that Google developed specifically for automakers to embed in their models. The Polestar 2 will come with Google Maps for navigation, along with an entire suite of available third-party apps that owners can download to the vehicle without having to sync a smartphone. 

Last year, the Polestar 2 won the luxury category in the annual German Car of the Year (GCOTY) awards. Among the judging criteria are design, drivetrain, handling, quality, comfort, practicality, safety, environment, infotainment and price/performance ratio. 

Polestar has plans to launch three new mass market electric models by 2024, including an SUV by 2022 named the Polestar 3. The other two models will launch in 2024.

In 2020, Polestar delivered approximately 10,000 vehicles to customers. The EV brand expects to sell approximately 290,000 vehicles per year by 2025. Polestar plans to expand its global distribution footprint to 30 markets by 2023.

With the backing of Geely and Volvo Cars, Polestar has access to deep automotive expertise, cutting-edge technologies and an agile, entrepreneurial culture that helps boost its potential for growth and success in the EV space as a publicly listed company.

Polestar has ambitious industry-leading targets, including the goals to develop a fully climate-neutral car by 2030.

"This is a really exciting time for Polestar. With two award-winning cars on the road today in 14 active markets across three continents, we seek to expand to 30 markets by 2023," said Thomas Ingenlath, Chief Executive Officer of Polestar. "In Alec and the Gores Guggenheim team, we have found a partner with an impressive track record of bringing leading companies to the public markets. The proposed business combination and listing position Polestar as a financially strong, future proof, global electric car company. It will enable us to accelerate our growth, strategy and most importantly, our mission towards sustainable mobility."

As a public company, Polestar will become a global premium EV company covering a majority of the EV market on three continents by 2025. The company will also be better positioned to take on segment leader Tesla, which has risen to become the world's most valuable electric automaker.

Polestar is also working on an advanced and futuristic electric sedan called the Precept. Although Polestar has not revealed the technical specifications of the Precept concept, it's expected that it will have a dual-motor setup and deliver around 400 miles of range, which will rival Tesla's flagship Model S.

The Polestar Precept concept.

Earlier this month, Polestar revealed a compact electric transporter called the "Re:Move", which is designed for zero-emissions, last-mile deliveries. The working prototype was unveiled at the IAA Mobility show in Munich. 

The Re:Move was designed to support the rise in e-commerce and last mile delivery needs, particularly in urban areas. It was developed in a collaboration between automaker Polestar, German industrial designer Konstantin Grcic, aluminum producer Hydro and electric motorcycle pioneer CAKE. 

The battery-powered delivery vehicle measures just 29 inches (750 mm) wide and can carry a payload of 400 pounds. The rider stands to operate the Re:Move and it resembles a giant electric scooter. 

Following Tesla's sales model, Polestar will not have traditional U.S. dealerships. Instead, Polestar is opening "Polestar Spaces" in major U.S. cities, which will serve as retail showrooms where potential customers can learn more about the brand and its vehicles.

The first Polestar Spaces opened in New York City and California in 2020.  

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.